Social Security payments set for big increase. What to know.

Us Set To Announce Huge Jump In Social Security Payments. An Explainer
AP Photo/Andres Kudacki, File

FILE - A man shops at a supermarket on Wednesday, July 27, 2022, in New York. 

NEW YORK (AP) — Tens of millions of older Americans are about to get what may be the biggest raise of their lifetimes.

On Thursday, the U.S. government is set to announce how big a percentage increase Social Security beneficiaries will see in monthly payments this upcoming year. It’s virtually certain to be the largest in four decades. It’s all part of an annual ritual where Washington adjusts Social Security benefits to keep up with inflation, or at least with one narrow measure of it.

Plenty of controversy accompanies the move, known as a cost-of-living adjustment or COLA. Critics say the data the government uses to set the increase doesn’t reflect what older Americans are actually spending, and thus the inflation they’re actually feeling. The increase is also one-size-fits-all, which means beneficiaries get the same raise regardless of where they live or how big a nest egg they may have.

Here’s a look at what’s happening: